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Webinar-Comp Foundations-Overpayment/Underpayment

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Just discovered that a large portion of your workforce is overpaid or underpaid? Not sure what to do?

Join us for a walkthrough on how to discover and manage over/underpayment.

This webinar covers:

- What to do with a new minimum wage
- Payment relative to market
- Employees who are paid out of range
- Communicating pay adjustments
- To freeze or not to freeze pay?

Published in: Recruiting & HR
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Webinar-Comp Foundations-Overpayment/Underpayment

  1. 1. Comp  Founda+ons:     So  you’re              paying,  now  what?   Over                     Under  
  2. 2. www.payscale.com   Introduc+on   Jenni  Marquez,  CCP   Sr.  Compensa+on  Professional   Camie  Bailey   Customer  Training  Specialist  
  3. 3. www.payscale.com   54  Million  Salary  Profiles   10  Org  types  350  Industries  15,000  Job  Titles   2,300  skills,  4,200  cer+fica+ons     The  World’s  Largest  Salary  Database  
  4. 4. www.payscale.com   The   Basics  
  5. 5. www.payscale.com   Start  by  understanding  your   compensa+on  context   Legal   Market   Org  
  6. 6. www.payscale.com   Legal  Context   Federal,  State,  and  Local  laws     Minimum  Wage   Fair  Labor  Standards  Act   Pay  Equity  Laws   Other  laws  
  7. 7. www.payscale.com   Market  Context  
  8. 8. www.payscale.com   Org  Context  
  9. 9. www.payscale.com   The   Science  
  10. 10. www.payscale.com   Examine  your  pay     • Iden+fy  Market  Value  for  Jobs   • Build  Ranges   • Evaluate  Range  Outliers  
  11. 11. www.payscale.com   Iden+fy  Market  Value  for  Jobs     •  Where  do  you  compete  for  talent?  
  12. 12. www.payscale.com   •  What  are  the  unique  compensable  factors?   Iden+fy  Market  Value  for  Jobs    
  13. 13. www.payscale.com   Match  Jobs,  not  People  
  14. 14. www.payscale.com   Tips  &  Best  Prac+ces:       •  When  searching;  less  is  more!   •  A  “good  match”  is  when  70%  or  greater  of   the  task  list  aligns  with  the  job  in  ques+on   •  You  cannot  edit  job  tasks   •  Consider  flipping  your  search  around    -­‐  Example:  Director  of  Sales  vs.  Sales  Director         Job  Matching  Webinar   Iden+fy  Market  Value  for  Jobs    
  15. 15. www.payscale.com   Set  Your  Target  Percen+le  
  16. 16. www.payscale.com   Set  Ranges  for  Your  Jobs  
  17. 17. www.payscale.com   Select  All  Market  Reports  in  Live  or  Scenario  
  18. 18. www.payscale.com   Click  in  a  row  to  bring  up  the  menu  and  choose   Set  Ranges  to  Market  
  19. 19. www.payscale.com   Use  Annualized  Min-­‐Mid-­‐ Max  to  Market  View   Job-­‐Based  Market  Range   Market  Value  at  Target   Difference  between   range  midpoint  and   market  at  target   Job-­‐Based  Market  Ranges  
  20. 20. www.payscale.com   Evaluate  Range  Outliers  
  21. 21. www.payscale.com   Range  Outliers  at  a  Glance  
  22. 22. www.payscale.com   min   max  mid   Individual  Range  Outliers   Be  an  Analy+cs  Hero  Webinar  
  23. 23. www.payscale.com   The  Art  
  24. 24. www.payscale.com   It’s  +me  to  make  some   recommenda+ons  
  25. 25. 26   Are  they  really   over/under  paid?  
  26. 26. 27   Examine  employee  pay  in   the  context  of…   •  Organiza+onal  goals   •  Policies   •  Compliance   •  Individual  results  and  accomplishments  
  27. 27. www.payscale.com   Op+ons  for  addressing   underpayment  
  28. 28. www.payscale.com   Increase  all  to  boiom  of  range  
  29. 29. www.payscale.com   Bring  employees  into  range  over  +me   •  28  employees  in  the  green   •  $143k  total,  0.53%  of  the  total  budget   •  Decide  on  a  plan:  e.g.,  spend  .25%  now  and  .25%  in  6  months   •  Priori+ze  
  30. 30. www.payscale.com   Priori+ze  by  those  furthest  from  range  
  31. 31. www.payscale.com   Priori+ze  by  performance  
  32. 32. www.payscale.com   Priori+ze  by  business  objec+ves  
  33. 33. www.payscale.com   Op+ons  for  addressing   overpayment  
  34. 34. www.payscale.com   Freeze  base  pay   •  95  employees  in  the  red   •  $572k  total,  which  is  2.10%  of  the  total  budget    
  35. 35. www.payscale.com   Offer  performance-­‐based     lump  sum  payout  
  36. 36. www.payscale.com   *New  -­‐  PayScale  Crew  makes  the   increase  process  easy   hip://payscale.hubs.vidyard.com/watch/FxUjY3g48VphMet4kYoXYL    
  37. 37. www.payscale.com   Allocate  smaller  increases   •  Using  a  merit  matrix,  those  high  in  range  already   receive  a  smaller  increase   •  Consider  making  “above”  increases  even  smaller  
  38. 38. www.payscale.com   Reduce  pay*   •  *Not  usually  recommended  –  check  w/  employment  lawyer   •  If  you  have  significant  overpayment,  consider  reducing  pay   •  This  some+mes  happens  in  organiza+ons  with  highly  tenure   •  64/476  employees  account  for  $248k  or  43%  of  pay  in  the  red  
  39. 39. High  pay  doesn’t  necessarily   mean  overpayment   Low  pay  doesn’t  necessarily   mean  underpayment  
  40. 40. A  new,  average  performer  may  be   “overpaid”  here   MINIMUM $50,300 $62,40 0 MIDPOINT MAXIMUM $74,40 0 Job  Pay  Range  
  41. 41. A  stellar  performer,  with  high  levels  of   experience,  skills,  and  demonstrated   results  would  be  “underpaid”  here   MINIMUM $50,300 $62,40 0 MIDPOINT MAXIMUM $74,40 0 Job  Pay  Range  
  42. 42. With  certain  comp  policies,  employees   within  their  first  90  days  in  entry  level   roles  may  be  appropriately  paid  here   MINIMUM $50,300 $62,40 0 MIDPOINT MAXIMUM $74,40 0 Job  Pay  Range  
  43. 43. www.payscale.com   The   Execu+on  
  44. 44. 45   Communicate   changes  well  
  45. 45. of  companies  are   confident  in  managers’   ability  to  have  tough   pay  conversa+ons     2016 PayScale Compensation Best Practices Report 17%
  46. 46. Train  Execu+ves  and  Managers   •  Purpose  of  comp  plan   •  Ra+onale  for  pay  changes   •  Communica+ng  changes    
  47. 47. www.payscale.com   Q  &  A    (we’ll  email  this  out)  

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